TIDMN4P
RNS Number : 9680D
N4 Pharma PLC
25 February 2020
25 February 2020
N4 Pharma plc
("N4 Pharma", the "Company" or the "Group")
Final Results
N4 Pharma Plc (AIM: N4P), the specialist pharmaceutical company
developing Nuvec(R), a novel delivery system for cancer treatments
and vaccines, is pleased to announce its audited results for the
year ended 31 December 2019.
Nigel Theobald, Chief Executive Officer of N4 Pharma Plc,
commented:
"The Directors believe we have made considerable progress in
understanding how Nuvec(R) works in the last 12 months which will
put us in a stronger position for potential collaboration
discussions as we continue to present our data to potential
licensing partners. Having demonstrated that Nuvec(R) can load and
transfect a range of DNA and mRNA antigens in vitro and also
produce an in vivo antibody response with a good safety profile, we
have recently worked on improving the dispersion of Nuvec(R) with a
view to addressing some of the inconsistencies seen in previous in
vivo work.
"Our next focus is to assess the improved dispersion with
further in vitro and in vivo testing of Nuvec(R) using OVA plasmid
DNA whilst, in parallel, working with Nanomerics on producing
stable Nuvec(R) formulations.
"We believe the work we have done in the last 12 months,
together with our ongoing studies, puts our Nuvec(R) delivery
system in a stronger position than it was when we first announced
our positive in vivo antibody results and we remain excited about
the potential for Nuvec(R) to become a credible delivery system in
the field of cancer therapeutics and vaccines."
Enquiries:
N4 Pharma Plc
Nigel Theobald, CEO Via Scott PR
Allenby Capital Limited Tel: +44(0)203 328 5656
James Reeve/Asha Chotai
Scott PR Tel: +44(0)1477 539 539
Georgia Smith
About N4 Pharma
N4 Pharma is a specialist pharmaceutical company developing a
novel delivery system for cancer and vaccine treatments using its
unique silica nanoparticle delivery system called Nuvec(R).
N4 Pharma's business model is to partner with companies
developing novel antigens for cancer and vaccine treatments to use
Nuvec(R) as the delivery vehicle to get their antigen into cells to
express the protein needed for the required immunity. As these
products progress through pre clinical and clinical programs, N4
Pharma will seek to receive up front payments, milestone payments
and ultimately royalty payments once products reach the market.
N4 Pharma plc
Chairman's Report
N4 Pharma Plc (the "Company"), is the holding company of N4
Pharma UK Limited ("N4 UK") and N4 Biotech Limited ("N4 Biotech")
which together at the date of these accounts form the group (the
"Group"). N4 Biotech was dissolved on 14 January 2020. N4 UK is a
specialist pharmaceutical company engaged in the development of a
mesoporous silica nanoparticle delivery system ("Nuvec(R)") to
improve the cellular delivery and potency of cancer treatments and
vaccines.
Review of operations for the financial year ended 31 December
2019
During the year to 31 December 2019, as anticipated, no revenue
was generated by the Group.
The operating loss for the year was GBP947,340 (31 December
2018: GBP1,417,089 loss).
In the year, GBP1,050,000 of new funds were raised through the
placing of 10,500,000 new ordinary shares (the "Placing").
Cash at the year-end stood at GBP965,752 (31 December 2018: GBP
793,141) .
Board Changes
During the period the Company appointed John Chiplin as
non-executive Chairman and Chris Britten as a non-executive
Director. Paul Titley stood down as a director and employee of the
Company. David Templeton became an executive director, taking
responsibility for the technical aspects of Nuvec(R)'s development.
These changes bring considerable experience and expertise to the
Board in order to take the Group forward.
Key Operational Events and Opportunities
The Group continues to confirm and extend the Nuvec(R) dataset
to enable it to undertake discussions with large pharmaceutical and
Biotech companies to license Nuvec(R) for their own pre-clinical
and clinical programs using nucleic acids. We now have a
significant amount of positive data giving a clear understanding
that:
-- a range of DNA and mRNA antigens can be loaded onto the
Nuvec(R) particles and successfully transfect cells in vitro;
-- Nuvec(R)'s mechanism of action to transfect cells is via
endocytosis into the cell and the release of payload into the
cytoplasm;
-- Nuvec(R) has a good safety profile: it degrades naturally in
the body and does not track to the liver;
-- importantly, Nuvec(R) works for pDNA and mRNA having shown an
in vivo antibody response for both; and
-- Nuvec(R) currently delivers a good response from two or three
injections but has shown inconsistent or negative responses when
just one injection is used.
The data we have generated so far is encouraging and shows that
Nuvec(R) has the potential to be an effective delivery system for
nucleic acids.
Due to inconsistencies identified in third party pre-clinical
studies, the Company decided to undertake a repeat of its
pre-clinical study with the University of Queensland, using OVA
pDNA. The repeat study added an additional arm to investigate
responses from one injection as well as three injections. The
repeat study confirmed a good response using Nuvec(R) at higher
doses using three injections but no response with just one
injection. This was a significant finding, as the previous studies
showing inconsistencies had all used just one injection, indicating
that the inconsistencies shown in the previous studies may have
been as a result of the dosing.
This work also showed that once the Nuvec(R) particles were
loaded with OVA pDNA, the formulation was not ideally dispersed.
This lack of dispersion is not an issue for in vitro work as the
particles are well dispersed in the experiment but due to the
concentrations used for in vivo experiments, is the dispersion is
likely to be a further explanation for the inconsistency seen when
using Nuvec(R) in vivo.
On 20 August 2019, the Company announced that it would undertake
a program of work to investigate how to improve the dispersity of
Nuvec(R) formulations once loaded with DNA and RNA. By improving
dispersity, the Company believes it will be able to demonstrate a
stronger more consistent in vivo response which will make it much
more attractive to third-parties for licensing opportunities.
The focus of this work is not to alter the basic silica
nanoparticle, but rather to look at the processes of how we load a
linker to the silica particle to enable DNA or RNA to be loaded to
the particle and also how the DNA or RNA itself is then loaded onto
the Nuvec(R) particle. The objective of the work is to improve
these processes so that a more even dispersion of DNA loaded
Nuvec(R) is achieved.
As announced in January 2020, we have now successfully completed
the first two phases of this work, with alterations to the
manufacturing process, demonstrating improved dispersion of Nuvec
(R) and how best to measure this dispersion. We have now begun the
phase to investigate how to add the DNA and maintain this improved
dispersion with the ongoing work programme, the expected timings of
which are as follows:
-- Q1 2020 - Nuvec(R) improved DNA loading process
-- Q2 2020 - in vitro testing of improvements
-- Q2-Q3 2020 - in vivo testing of improved transfection and immune response
-- Q3-Q4 2020 - conduct in vivo cancer model
Assuming a successful conclusion to this program of work, the
Directors believe the subsequent data pack and improved consistency
will put the Group in a much stronger position to embark on
licensing discussions with prospective partners.
At the end of 2018, the Company announced the Nuvec(R) delivery
system was accepted for characterisation by the European
Nanomedicine Characterisation Library ("EUNCL"). Due to delays at
EUNCL's end, the actual work did not start until the end of Q3 2019
and initially focused on endotoxin assessments and dispersion. The
endotoxin assay used by EUNCL was discovered not to be suitable for
Nuvec(R) so no results were possible. The Company has separately
undertaken its own endotoxin tests on Nuvec(R) and found no
endotoxins present so this is not considered by the Directors to be
an issue. EUNCL's dispersion tests confirmed what the Company had
already discovered, namely that there appears to be agglomeration
of the Nuvec(R) particle.
Unfortunately, funding for the EUNCL programme has not been
continued beyond 2019 so we will not undertake any further work
with EUNCL. The Group is yet to receive a final report from EUNCL,
however it is not expected to contain any further significant
information above what has already been shared with us around
endotoxin analysis and dispersion. In light of the work we are now
doing, which addresses a lot of the EUNCL findings, the Directors
do not believe that the closure of the program will negatively
impact the Group, Nuvec(R) work or its prospects.
Following the successful completion of the first phase of the
CMC program showing the ability to improve Nuvec(R) dispersion, in
January 2020 the Company entered into a research collaboration
agreement with Nanomerics Ltd, who have considerable expertise in
the field of nanoparticle formulation and development. This
provides the Group with access to the laboratories at the London
School of Pharmacy, part of the University College of London (UCL),
where we can undertake more accelerated work on the development of
Nuvec(R) and perform our planned in vivo efficacy studies.
The agreement with Nanomerics will allow the Group to build on
the previously announced work and undertake full formulation
assessment, including freeze drying, reconstitution and stability
of the formulation. Achieving a stable formulation capable of being
re-constituted for injection is an important aspect of making Nuvec
(R) easier to use and will allow the Group to broaden how it can
interact with potential partners as the access to UCL labs will
allow us to do the formulation and testing work ourselves rather
than relying on partners, thereby giving greater control over the
early phases of collaborative research agreements.
Future Prospects
The Company is restructuring its chemistry, manufacturing and
controls ("CMC") operations and Dr Allan Hey will be stepping down
as Head of CMC Development at the end of February 2020. Allan will
be replaced by Rob Harris, a CMC Consultant with considerable
experience of working with nanoparticles. Rob will advise the
Company on all the strategic aspects of the Nuvec(R) CMC
program.
The Group has already demonstrated that Nuvec(R) is capable of
loading and transfecting both DNA and mRNA and producing
antibodies. The next phase of work is focused on making Nuvec(R)
more consistent, easier to handle and therefore more
efficacious.
The use of DNA and RNA in the life science sector is a major
growth area and a consistent theme in all discussions about the
potential for DNA and RNA is the need for a safe and effective
delivery system. The Board remains very optimistic about the future
of the Group and its prospects and believes the successful
conclusion of its CMC and in vivo efficacy studies will make it an
attractive alternative to current delivery systems being used in
this area.
In addition to our primary focus of optimizing Nuvec(R), the
Board has considered a number of investment and acquisition
opportunities to widen our asset base. Whilst discussions have not
resulted in the conclusion of any transaction, we remain open to
diversifying our portfolio if an attractive proposition presents
itself on favourable terms.
On behalf of the Board, I would like to thank all of our
shareholders for their continued patient support and look forward
to providing further updates on our progress.
By order of the Board
John Chiplin
Chairman
N4 Pharma Plc
Consolidated Statement of Comprehensive Income for the year
ended 31 December 2019
Notes 2019 2018
GBP GBP
------------ ------------------------------------
Government grant income - 72,832
Gross profit - 72,832
Research and development
costs (216,948) (846,176)
General and administration
costs (730,392) (643,745)
Operating loss for the
year (947,340) (1,417,089)
Finance expenditure (1,385) (981)
Gain on sale of investment - 27,693
Loss for the year before
tax 4 (948,725) (1,390,377)
Taxation 5 72,352 205,534
Loss for the year after
tax (876,373) (1,184,843)
Other comprehensive income
net of tax - -
Total comprehensive loss
for the year attributable
to equity owners of N4
Pharma Plc (876,373) (1,184,843)
------------------------------ ------ ------------ ------------------------------------
Loss per share attributable
to owners of the parent
Weighted average number
of shares:
Basic 100,168,016 89,440,373
Diluted 100,168,016 91,305,287
Basic loss per share (0.87p) (1.32p)
Diluted loss per share (0.87p) (1.30p)
All activities derive from continuing operations.
N4 Pharma Plc
Consolidated Statement of Financial Position as at 31 December
2019
Notes 2019 2018
GBP GBP
------------- -------------
Assets
Non-current assets
Investments 6 - -
----------------------------- ------ ------------- -------------
-
Current assets
Trade and other receivables 7 99,269 276,926
Cash and cash equivalents 965,752 793,141
1,065,021 1,070,067
Total Assets 1,065,021 1,070,067
----------------------------- ------ ------------- -------------
Liabilities
Current liabilities
Trade and other payables 8 (51,547) (159,666)
Accruals and deferred
income (26,136) (30,457)
----------------------------- ------ ------------- -------------
(77,683) (190,123)
Total assets less
current liabilities 987,338 879,944
----------------------------- ------ ------------- -------------
Net Assets 987,338 879,944
----------------------------- ------ ------------- -------------
Equity
Share capital 10 8,676,675 8,634,675
Share premium 10 10,327,258 9,328,848
Share option reserve 10 25,266 81,909
Reverse acquisition
reserve (14,138,244) (14,138,244)
Merger reserve 279,347 279,347
Retained earnings (4,182,964) (3,306,591)
----------------------------- ------ ------------- -------------
Total Equity 987,338 879,944
----------------------------- ------ ------------- -------------
N4 Pharma Plc
Consolidated Statement of Changes in Equity for the year ended
31 December 2019
(i) Year ended Share Share Share Option Reverse Merger Retained Total Equity
31 December Capital Premium Reserve Acquisition Reserve Earnings
2019 Reserve
GBP GBP GBP GBP GBP GBP GBP
----------- ------------- ------------- -------------- ------------- ------------ -------------
Balance at 1
January 2019 8,634,675 9,328,848 81,909 (14,138,244) 279,347 (3,306,591) 879,944
Total
comprehensive
loss for
the year - - - - - (876,373) (876,373)
Share issue 42,000 998,410 - - - - 1,040,410
Share option
reserve - - (56,643) - - - (56,643)
----------- ------------- ------------- -------------- ------------- ------------ -------------
At 31 December
2019 8,676,675 10,327,258 25,266 (14,138,244) 279,347 (4,182,964) 987,338
(ii) Year Share Share Share Option Reverse Merger Retained Total Equity
ended 31 Capital Premium Reserve Acquisition Reserve Earnings
December Reserve
2018
GBP GBP GBP GBP GBP GBP GBP
----------- ------------ --------------- --------------- ------------ ------------- ------------------
Balance at 1
January 2018 8,579,396 8,513,670 147,635 (14,138,244) 299,045 (2,121,748) 1,279,754
Total
comprehensive
loss for
the year - - - - - (1,184,843) (1,184,843)
Share issue 55,279 815,178 - - (19,698) - 850,759
Share option
reserve - - (65,726) - - - (65,726)
At 31 December
2018 8,634,675 9,328,848 81,909 (14,138,244) 279,347 (3,306,591) 879,944
N4 Pharma Plc
Consolidated Statement of Cash Flow for the year ended 31
December 2019
2019 2018
GBP GBP
----------------------------------- ------------ --------------
Operating activities
Loss before tax (948,725) (1,390,377)
Finance expenditure 1,385 981
Share based payments to employees 3,767 629
Gain on sale of investments - (27,693)
Operating loss before changes
in working capital (943,573) (1,416,460)
Movements in working capital:
Decrease/(increase) in trade
and other receivables 29,441 (9,266)
(Decrease)/increase in trade,
other payables and accruals (112,440) 10,905
Taxation 220,568 70,574
Cash used in operations (806,004) (1,344,247)
------------------------------------ ------------ --------------
Net cash flows used in operating
activities (806,004) (1,344,247)
------------------------------------ ------------ --------------
Investing activities
Sale of investments - 27,693
Net cash flows from investing
activities - 27,693
------------------------------------ ------------ --------------
Financing activities
Finance expenditure (1,385) (981)
Net proceeds of ordinary share
issue 980,000 784,404
Net cash flows from financing
activities 978,615 783,423
------------------------------------ ------------ --------------
Net increase/(decrease) in
cash and cash equivalents 172,611 (533,131)
Cash and cash equivalents
at beginning of the year 793,141 1,326,272
Cash and cash equivalents
at 31 December 965,752 793,141
Notes to the consolidated financial statements for the year
ended 31 December 2019
1. Accounting policies
1.1 Reporting entity
N4 Pharma Plc (the "Company"), is the holding company for N4
Pharma UK Limited ("N4 UK"), and N4 Biotech Limited ("N4 Biotech"),
and together form the group (the "Group"). N4 Pharma UK Limited is
a specialist pharmaceutical company engaged in the development of
mesoparticulate silica delivery systems to improve the cellular
delivery and potency of vaccines . The nature of the business is
not deemed to be impacted by seasonal fluctuations and as such
performance is expected to be consistent.
The Company is domiciled in England and Wales and was
incorporated and registered in England and Wales on 6 July 1979 as
a public limited company and its shares are admitted to trading on
AIM (LSE: N4P). The Company's registered office is located at 6th
Floor, 60 Gracechurch Street, London, EC3V 0HR.
The consolidated financial statements have been prepared and
approved by the Directors in accordance with International
Financial Reporting Standards as adopted by the EU ("Adopted
IFRSs"). The consolidated financial statements comply with the
Companies Act 2006 and give a true and fair view of the state of
affairs of the Group.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
consolidated financial statements.
1.2 Measurement convention
The consolidated financial statements are prepared on the
historical cost basis, except for the following items:
-- Share-based payments related to investment acquisition are
measured at fair value shown in the Merger Reserve.
-- Share-based payments related to employee costs are measured
at fair value shown in the Statement of Comprehensive Income.
-- Share Warrants and Options are measured at fair value using
the Black Scholes model (see note 9).
-- Equity investments are measured at fair value.
The consolidated financial statements are presented in Great
British Pounds ("GBP" or "GBP").
1.3 Going concern
These consolidated financial statements have been prepared on
the basis of accounting principles applicable to a going concern.
The Directors consider that the Group will have access to adequate
resources, as set out below, to meet both operational requirements
for at least 12 months from the date of approval of these
consolidated financial statements. For this reason, they continue
to adopt the going concern basis in preparing the consolidated
financial statements.
The Group prepares regular business forecasts and monitors its
projected cash flows, which are reviewed by the Board. Forecasts
are adjusted for reasonable sensitivities that address the
principal risks and uncertainties to which the Group is exposed,
thus creating a number of different scenarios for the Board to
challenge. In those cases, where scenarios deplete the Group's cash
resources too rapidly, consideration is given to the potential
actions available to management to mitigate the impact of one or
more of these sensitivities, in particular the discretionary nature
of costs incurred by the Group, in order to ensure the continued
availability of funds.
As the Group did not have access to bank debt and future funding
is reliant on issues of shares in the parent Company, the Board has
derived a mitigation plan for the scenarios modelled as part of the
going concern review.
On the basis of this analysis, the Board has concluded that
there is a reasonable expectation that the Company will have
adequate resources to continue in operational existence for the
foreseeable future being a period of at least twelve months from
the balance sheet date.
The Group currently has no source of operating cash inflows,
other than interest and grant income, and has incurred net
operating cash outflows for the year ended 31 December 2019 of
GBP806,004 (2018: GBP1,344,247 outflow). At 31 December 2019, the
Group had cash balances of GBP965,752 (2018: GBP793,141) and a
surplus in net working capital (current assets, including cash,
less current liabilities) of GBP987,338 (2018: GBP879,944).
The Group continues to take steps to manage operational
expenditure effectively and to manage the cash required for
budgeted activities and working capital for at least 12 months from
the date of approval of the consolidated financial statements.
Close monitoring of current and forecast expenditure is undertaken
by the board and key executive decisions discussed at monthly board
meetings.
1.4 Basis of consolidation
Intra-Group balances and transactions, and any unrealised income
and expenses arising from intra-Group transactions, are eliminated
in preparing the consolidated financial statements.
1.5 Revenue
Revenue is recognised to the extent this it is probable that
economic benefit will flow to the Group and the revenue can be
reliably measured. Revenue is measured at the lower of value of the
consideration received or receivable for the sale of goods or
services, excluding discounts, rebates, VAT and other sales taxes
and duties.
The Group has not recognised any revenue to date.
1.6 Government grant income
Government grants are recognised only when there is reasonable
assurance that the Group will comply with the conditions attaching
to them and that the grants will be received.
Government grants are recognised in the consolidated statement
of comprehensive income on a systematic basis over the periods in
which the Group recognises and expenses the related costs for which
the grants are intended to compensate.
Government grants that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related
costs are recognised in the consolidated statement of comprehensive
income in the period in which they become receivable.
1.7 Expenses
Financing income and expenses
Financing expenses comprise interest payable and finance charges
and net foreign exchange losses that are recognised in the
consolidated statement of comprehensive income (see foreign
currency accounting policy note 1.13). Financing income comprises
interest receivable on funds invested and net foreign exchange
gains.
Interest income and interest payable is recognised in the
consolidated statement of comprehensive income as it accrues, using
the effective interest method. Foreign currency gains and losses
are reported on a net basis.
Research and development
Research costs are charged against the consolidated statement of
comprehensive income as they are incurred. Certain development
costs will be capitalised as intangible assets when it is probable
that the future economic benefits will flow to the Group. Such
intangible assets will be amortised on a straight-line basis from
the point at which the assets are ready for use, over the period of
the expected benefit, and are reviewed for impairment at each year
end date. Other development costs are charged against income as
incurred since the criteria for their recognition as an asset is
not met.
The criteria for recognising expenditure as an asset are:
-- It is technically feasible to complete the product;
-- Management intends to complete the product and use or sell
it;
-- There is an ability to use or sell the product;
-- It can be demonstrated how the product will generate probable
future economic benefits;
-- Adequate technical, financial and other resources are
available to complete the development, use and sale of the product;
and
-- Expenditure attributable to the product can be reliably
measured.
The costs on an internally generated intangible asset comprise
all directly attributable costs necessary to create, produce and
prepare the asset to be capable of operating in the manner intended
by management. Directly attributable costs include employee costs
incurred on technical development, testing and certification,
materials consumed and any relevant third-party cost. The costs of
internally generating developments are recognised as intangible
assets and are subsequently measured in the same way as externally
acquired intangible assets. However, until completion of the
development project, the assets are subject to impairment testing
only.
1.8 Taxation
Taxation
Taxation for the year comprises current and deferred tax. Tax is
recognised in the consolidated statement of comprehensive income,
except to the extent that it relates to items recognised directly
in equity.
Current or deferred taxation assets and liabilities are not
discounted.
Current tax
Current tax is recognised at the amount of tax payable using the
tax rates and laws that have been enacted or substantively enacted
by the consolidated statement of financial position date.
Deferred tax
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the consolidated statement
of financial position date.
Timing differences arise from the inclusion of income and
expenses in tax assessments in periods different from those in
which they are recognised in consolidated financial statements.
Deferred tax is measured using tax rates and laws that have been
enacted or substantively enacted by the year end and that are
expected to apply to the reversal of the timing difference.
Unrelieved tax losses and other deferred tax assets are
recognised only to the extent that it is probable that they will be
recovered against the reversal of deferred tax liabilities or other
future taxable profits.
1.9 Earnings per share
The Group presents basic and diluted earnings or loss per share
data for its ordinary shares. Basic earnings/loss per share is
calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted average number of
ordinary shares outstanding during the period, adjusted for own
shares held. Diluted earnings/loss per share is determined by
adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding,
adjusted for own shares held, for the effects of all dilutive
potential ordinary shares, which comprise share options and
warrants granted.
1.10 Operating segments
Segment results that are reported to the Chief Executive Officer
include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated items
comprise mainly corporate assets, head office expenses, and income
tax assets and liabilities.
Segment capital expenditure is the total cost incurred during
the period to acquire plant and equipment, and intangible assets
other than goodwill.
The Group operated in one business segment, that of the
development and commercialisation of medicines via its delivery
system called Nuvec(R). No revenue has yet been generated by any of
the work undertaken by the Group.
The Directors consider that there are no identifiable business
segments that are subject to risks and returns different to the
core business. The information reported to the Directors, for the
purposes of resource allocation and assessment of performance, is
based wholly on the overall activities of the Group.
1.11 Classification of financial instruments issued by the Group
In accordance with IAS 32, financial instruments issued by the
Group are treated as equity only to the extent that they meet the
following two conditions:
(a) they include no contractual obligations upon the Group to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the Group; and
(b) where the instrument will or may be settled in the Company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company's own
equity instruments or is a derivative that will be settled by the
Company's exchanging a fixed amount of cash or other financial
assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the Company's own shares, the
amounts presented in these consolidated financial statements for
called up share capital and share premium account exclude amounts
in relation to those shares.
Where a financial instrument that contains both equity and
financial liability components exists these components are
separated and accounted for individually under the above
policy.
1.12 Non-derivative financial instruments
Non-derivative financial instruments comprise investments, trade
and other receivables, cash and cash equivalents and trade and
other payables.
Investments
Investments are equity investments recognised initially at cost
and subsequently revalued to their fair value. Fair value is
determined by reference to published price quotations in the AIM
market. Gains and losses arising from changes in the fair value are
recognised in profit or loss within other income or other
expenses.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and
comprise cash in hand, deposits held at call with banks, other
short-term liquid investments with original maturities of three
months or less, and bank overdrafts. Any overdrafts are shown
within borrowings in current liabilities.
1.13 Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the
respective functional currencies of the Group's entities at the
foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies
at the consolidated statement of financial position date are
retranslated to the functional currency at the foreign exchange
rate ruling at that date. Foreign exchange differences arising on
translation are recognised in the consolidated statement of
comprehensive income. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the
transaction.
1.14 Impairment
A financial asset not carried at fair value through profit or
loss is assessed at each reporting date to determine whether there
is objective evidence that it is impaired. A financial asset is
impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset, and that the
loss event had a negative effect on the estimated future cash flows
of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate.
Interest on the impaired asset continues to be recognised through
the unwinding of the discount. When a subsequent event causes the
amount of impairment loss to decrease, the decrease in impairment
loss is reversed through profit or loss.
The carrying amounts of the Group's non-financial assets are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated.
The recoverable amount of an asset is the greater of its value
in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset. For the purpose of impairment testing,
assets that cannot be tested individually are grouped together into
the smallest Group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of
other assets or Groups of assets (the "cash-generating unit").
An impairment loss is recognised if the carrying amount of an
asset or its cash generating unit exceeds its estimated recoverable
amount. Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of cash generated units are
allocated first to reduce the carrying amount of any goodwill
allocated to the units, and then to reduce the carrying amounts of
the other assets in the unit (Group of units) on a pro rata
basis.Impairment losses recognised in prior periods are assessed at
each reporting date for any indications that the loss has decreased
or no longer exists. An impairment loss is reversed if there has
been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the
asset's carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised.
1.15 Share based payment arrangements
Share-based payment arrangements in which the Group receives
goods or services as consideration for its own equity instruments
are accounted for as equity-settled share-based payment
transactions, regardless of how the equity instruments are obtained
by the Group.
Share-based transactions, other than those with employees, are
measured at the value of goods or services received where this can
be reliably measured. Where the services received are not
identifiable, their fair value is determined by reference to the
grant date fair value of the equity instruments provided. Should it
not be possible to measure reliably the fair value of identifiable
goods and services received, their fair value shall be determined
by reference to the fair value of the equity instruments provided
measured over the period of time that the goods and services are
received.
The expense is recognised in the consolidated statement of
comprehensive income or capitalised as part of an asset when the
goods are received or as services are provided, with a
corresponding increase in equity.
The grant date fair value of share-based payment awards granted
to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the
employees become unconditionally entitled to the awards. The fair
value of the options granted is measured using an option valuation
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of awards for which the
related service and non-market vesting conditions are expected to
be met, such that the amount ultimately recognised as an expense is
based on the number of awards that do meet the related service and
non-market performance conditions at the vesting date. For
share-based payment awards with non-vesting conditions, the grant
date fair value of the share-based payment is measured to reflect
such conditions and there is no "true-up" for differences between
expected and actual outcomes.
Share-based payment transactions in which the Group receives
goods or services by incurring a liability to transfer cash or
other assets that is based on the price of the Group's equity
instruments are accounted for as cash-settled share-based payments.
The fair value of the amount payable to recipients is recognised as
an expense, with a corresponding increase in liabilities, over the
period in which the recipients become unconditionally entitled to
payment. The liability is re-measured at each consolidated
statement of financial position date and at settlement date. Any
changes in the fair value of the liability are recognised in the
consolidated statement of comprehensive income.
1.16 Adoption of new and revised International Financial Reporting Standards
The following IFRS standards, amendments or interpretations
became effective during the year ended 31 December 2019 but have
not had a material effect on this consolidated financial
information:
IFRS 16 Leases
IFRIC 23 Uncertainty over Income Tax Treatments
IFRS 9 Prepayments Features with Negative Compensation
IAS 28 Long-term Interests in Associates and Joint Ventures
IAS19 Plan amendment, Curtailment and Settlement
All new standards and amendments to standards and
interpretations effective for annual periods beginning on or after
1 January 2019 that are applicable to the Group have been applied
in preparing these consolidated financial statements.
The standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the consolidated financial
statements are disclosed below. The Group intends to adopt these
standards, if applicable, when they become effective.
Effective
Standard date
------------------------------------------------------ ----------
Amendments to References to the Conceptual Framework 1 January
in IFRS Standards 2020
Amendments to IFRS 3 Business Combinations 1 January
2020
Amendments to IAS 1 and IAS 8: Definition of Material 1 January
2020
Interest Rate Benchmark Reform: amendments to IFRS 1 January
9, IAS 39 and IFRS 7 2020
The Directors are continuing to assess the potential impact that
the adoption of the standards listed above will have on the
consolidated financial statements for the year ended 31 December
2019.
1.17 Use of estimates and judgements
The preparation of consolidated financial statements in
conformity with IFRSs requires management to make certain
judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets,
liabilities, income and expenses during the period. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
In the process of applying the Group's accounting policies,
management has decided the following estimates and assumptions are
material to the carrying amounts of assets and liabilities
recognised in the consolidated financial statements.
Critical judgements
Research and development expenditure
The key estimates and judgements surrounding the capitalisation
of Research & Development expenditure is such that this
expenditure will only be capitalised when the recognition criteria
is met and is otherwise written off to the consolidated statement
of comprehensive income. The recognition criteria include the
identification of a clearly defined project with separately
identifiable expenditure where the outcome of the project, in terms
of its technical feasibility and commercial viability, can be
measured or assessed with reasonable certainty and that sufficient
resources exist to complete a profitable project. In the event that
these criteria are met, and it is probable that future economic
benefit attributable to the product will flow to the Group, then
the expenditure will be capitalised.
Impairment of investments and intercompany debtors
The subsidiary has sustained losses and the balance sheet is in
deficit. This is a potential indicator of impairment. The
recoverability of intercompany debtor and the cost of investment is
dependent on the future profitability of the entity. No provision
for impairment has been made in these accounts and this is a
significant judgement.
2. Risk management
Overview
The Group has exposure to the following risks:
-- Credit risk;
-- Liquidity risk;
-- Tax risk;
-- Market risk; and
-- Operational risk
This note presents information about the Group's exposure to
each of the above risks, its objectives, policies and processes for
measuring and managing risk, and its management of capital. Further
quantitative disclosures are included throughout these consolidated
financial statements.
Risk management framework
The Board of Directors has overall responsibility for the
establishment and oversight of the risk management framework and
developing and monitoring the Group's risk management policies. Key
risk areas have been identified and the Group's risk management
policies and systems will be reviewed regularly to reflect changes
in market conditions and the Group's activities.
The Audit Committee oversees how management monitors compliance
with the Group's risk management policies and procedures and
reviews the adequacy of the risk management framework in relation
to the risks faced by the Group.
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
bank deposits and receivables. See note 12 for further detail. The
risk of non-collection is considered to be low. This risk is deemed
low at present due to the Group not yet trading and generating
revenue but is a consideration for future risks.
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
Tax risk
Any change in the Group's tax status or in taxation legislation
or its interpretations could affect the value of the investments
held by the Group or the Group's ability to provide returns to
shareholders or alter post-tax returns to shareholders.
Market risk and competition
The Group operates as a specialist pharmaceutical company
engaged in the development of mesoparticulate silica delivery
systems to improve the cellular delivery and potency of vaccines.
The Group is entering into a market with existing competitors and
the prospect of new entrants entering the current market. There is
no guarantee that current competitors or new entrants to the market
will not appeal to a wider portion of the Group's target market or
command broader band awareness.
In addition, the Group's future potential revenues from product
sales will be affected by changes in the market price of
pharmaceutical drugs and could also be subject to regulatory
controls or similar restrictions.
Operational risk
The Group is at an early stage of development and is subject to
several operational risks. The commencement of the Group's material
revenues is difficult to predict and there is no guarantee the
Group will generate material revenues in the future.
The Group has a limited operational history upon which its
performance and prospects can be evaluated and faces the risks
frequently encountered by developing companies. The risks include
the uncertainty as to which areas of pharmaceuticals to target for
growth.
Regulatory and legislative risk
The operations of the Group are such that it is exposed to the
risk of litigation from its suppliers, employees and regulatory
authorities. Exposure to litigation or fines imposed by regulatory
authorities may affect the Group's reputation even though monetary
consequences may not be significant.
Changes to legislation, regulations, rules and practices may
change and is often the case in the pharmaceutical industry which
is highly regulated and susceptible to regular change. Any changes
may have an adverse effect on the Group's operations.
Protection of intellectual property
The Group's ability to compete significantly relies upon the
successful protection of its intellectual property, in particular
its licenced and owned patent applications for Nuvec(R). The Group
seeks to protect its intellectual property through the filing of
worldwide patent applications, as well as robust confidentiality
obligations on its employees. However, this does not provide
assurance that a third party will not infringe on the Group's
intellectual property, release confidential information about the
intellectual property or claim technology which is registered to
the Group.
Capital management
The Group has no loans or borrowings and has sufficient
resources, in the view of the Directors, to meet its working
capital requirements for the next 12 months.
The Group manages its capital through the preparation of
detailed forecasts, and tracks actual receipts and outlays against
the forecasts on a regular basis, to ensure that the Group will be
able to continue as a going concern while maximising the return to
shareholders.
The capital structure of the Group consists of cash and cash
equivalents and equity comprising, capital, reserves and
accumulated losses.
3. Employees and directors
The average monthly number of employees during the year was
5(2018: 4). The directors of the Group are employed by N4 Pharma UK
Limited UK and as such are included in the employee figure. Total
directors remuneration is detailed in note 13 of these consolidated
financial statements.
2019 2018
GBP GBP
Wages and Salaries 270,472 233,282
Social security costs 34,956 22,556
Pension costs 1,209 807
-------- --------
306,637 256,645
4. Loss before tax
2019 2018
GBP GBP
Loss before taxation is arrived
after charging:
Fees payable to the Group's auditors
for the audit
of the Group's financial statements 21,200 20,600
Other fees payable to auditors:
* Other assurance services 700 1,000
* Tax advisory services - 3,550
------- -------
5. Taxation
2019 2018
GBP GBP
Current tax
Research and development tax credit
receivable for the current period (72,352) (222,066)
Adjustments in respect of prior
periods - 16,532
--------- ----------
(72,352) (205,534)
Deferred tax
Origination and reversal of temporary
differences - -
--------- ----------
Tax in income statement (72,352) (205,534)
--------- ----------
The tax charge for the year can be reconciled to the loss in the
Consolidated Statement of Comprehensive Income as follows:
2019 2018
GBP GBP
Loss before taxation (948,725) (1,390,377)
---------- ------------
Tax at the UK corporation tax rate
of 19% (2018: 19%) (180,258) (264,171)
Expenses not deductible - (5,320)
Net Research and development tax
credits (72,352) (96,406)
Changes in unrecognized deferred
tax 180,258 143,831
Prior year adjustment - 16,532
---------- ------------
Tax charge for the year (72,352) (205,534)
---------- ------------
At the year end the Group had trading losses carried forward of
GBP1,706,986 (2018: GBP1,257,239) for use against future
profits.
6. Investments
Inventory of securities
The Company held 1,388,889 Ferring warrants and 542,233 Valirx
warrants both of which had no value as at the year-end 31 December
2018. These were legacy holdings from Onzima Plc prior to the RTO.
These warrants expired during the financial year ended 31 December
2019.
7. Trade and other receivables
2019 2018
GBP GBP
Prepayments 11,758 11,861
VAT receivable 13,660 42,998
Corporation tax debtor 72,352 220,568
R&D expenditure credit 1,499 1,499
Loan interest receivable - -
Other debtors - -
------- --------
99,269 276,926
8. Trade and other payables
2019 2018
GBP GBP
Trade creditors 27,157 113,093
Employee creditors 8,152 9,107
Loan due to directors 16,000 36,000
Other creditors 238 1,466
------- --------
51,547 159,666
9. Share-based payments
a) Options
The Company has the ability to issue options to Directors to compensate
them for services rendered and incentivise them to add value to
the Group's longer-term share value. Equity settled share-based
payments are measured at fair value at the date of grant. The fair
value determined is unwound on a straight-line basis over the vesting
period based on the Group's estimate of the number of shares that
will vest and recognised as share premium. The value of the change
is adjusted to reflect the expected and actual levels of vesting.
Cancellations of equity instruments are treated as an acceleration
of the vesting period and any outstanding charge is recognised in
full immediately.
Fair value is measured using a Black Scholes pricing model. The
key assumptions used in the model have been adjusted based on management's
best estimate for the effects of non-transferability, exercise restrictions
and behavioral considerations. The inputs into model were as follows:
2017 Options 2018 Options 2019 Options
Share price 6.375p 6.6p 3.55p
Exercise price 7p 6.6p 3.55p
Expected volatility 27.2% 45.2% 37.4%
Expected option
life 3 years 6.5 years 6.5 years
Risk free rate 4.75% 5.00% 5.00%
As at 31 December 2019, there were 7,679,370 (2018: 7,249,084) options
in existence over ordinary shares of the Company allocated as follows:
Ordinary Exercise
Date of shares under Price
Name Grant option Expiry Date GBP
2015 Options
Gavin Burnell 14.10.15 2,701,210 14.10.25 0.028
Luke Cairns 14.10.15 675,302 14.10.25 0.028
2017 Options
Luke Cairns 03.05.17 717,143 14.10.25 0.070
David Templeton 03.05.17 717,143 14.10.25 0.070
Paul Titley 03.05.17 717,143 14.10.25 0.070
2018 Options
Alan Hey 26.09.18 717,143 26.09.28 0.066
2019 Options
John Chiplin 21.05.19 717,143 21.05.29 0.0355
Christopher Britten 21.05.19 717,143 21.05.29 0.0355
Total options 7,679,370
--------------
The aggregate fair value of the share options issued is as
follows:
2019 2018
GBP GBP
2015 Options 17,831 20,910
2017 Options 3,037 6,040
2018 Options 2,999 630
2019 Options 1,399 - -
------- -------
25,266 27,580
------- -------
Each option entitles the holder to subscribe for one ordinary
share in N4 Pharma Plc. Options do not confer any voting rights on
the holder.
In the case of the 2017 share options granted to Paul Titley, a
total of 1,434,286 were granted, the exercise of options over
717,143 ordinary shares were subject to certain performance
conditions. These options were exercisable at a price of 7 pence
per share (post-Share Re-Organisation) at any time before 14
October 2025. However, these share options lapsed prior to the
final reporting date of 31 December 2019 due to his departure from
the Company and those targets not being met. This leaves Paul
Titley with 717,143 options which are exercisable on the 3rd
anniversary of Admission, being 3 May 2020.
On 26 September 2018 a further 1,004,000 options over ordinary
shares were granted under the Company's share option scheme to
Andrew Leishman and Alan Hey, and are exercisable at a price of
6.60p per share.
The share options granted to Andrew Leishman lapsed on 1 January
2019 due to his departure from the Company.
The share options granted to Alan Hey lapsed subsequent to year
end 31 December 2019 due to his departure from the Company.
On 21 May 2019 717,143 options over ordinary shares were granted
to both John Chiplin and Christopher Britten under the Company's
share option scheme and are exercisable at a price of 3.55p per
share.
a) Warrants
As part of the Placing on 3 May 2017 which raised GBP1,500,000
before fees and expenses, the Company issued warrants on a 1 for 1
basis at an exercise price of 8.5p per warrant. This resulted in
the issue of 21,428,571 warrants exercisable at 8.5p. The Company
also issued warrants, exercisable at 8.5p, to the Company's brokers
on the transaction in lieu of fees (together, the "Placing
Warrants"). This resulted in the total number of Placing Warrants
in issue immediately following the Placing being 22,710,923.
The warrants entitled holders to subscribe for new ordinary
shares at any time in the period of two years following the grant
of the warrants. The expiry date of the placing warrants was 3 May
2019.
2019
Date of Grant Warrant E xp i E xerc Exercised Number of Remaining
balance ry Date ise Pr Warrants Shares issued Warrants
at 1 January i ce GBP (1:1) at 31 December
2019 2019
03.05.2017 11,054,071 03.05.2019 0.085 - - -
--------------- -------------- ----------- ---------- ---------- --------------- ----------------
2018
Date of Grant Warrant E xp i E xerc Exercised Number of Remaining
balance ry Date ise Pr Warrants Shares issued Warrants
at 1 January i ce GBP (1:1) at 31 December
2018 2018
03.05.2017 20,282,351 03.05.2019 0.085 9,228,280 9,228,280 11,054,071
--------------- -------------- ----------- ---------- ---------- --------------- ----------------
During the year ended 31 December 2019 none of the warrants
issued on 3 May 2017 were exercised (2018: 9,228,280). The
remaining balance of the warrants totaling 11,054,071 expired on 3
May 2019.
During the year, an amount of GBP54,329 (2018: GBP792,846),
representing the expired warrants (2018: exercised warrants), has
been recognised against share premium and GBPnil (2018: GBP36,913)
to share capital. The fair value of the warrants in issue and not
yet exercised was determined using the Black Scholes model. The
fair value of the warrants at 31 December 2019 is GBPnil (2018:
GBP54,329).
10. Capital and reserves
2019 2018
GBP GBP
101,462,537 Ordinary Shares of
0.4p each (2018: 90,962,537 Ordinary
Shares of 0.4p each) 405,850 363,850
137,674,431 Deferred Shares of
0.4p each (2018: 137,674,431 Deferred
Shares of 0.4p each) 5,506,977 5,506,977
279,176,540 Deferred Shares of
0.099p each (2018: 279,176,540
Deferred Shares of 0.099p each) 2,763,848 2,763,848
---------- ----------
8,676,675 8,634,675
========== ==========
All ordinary shares rank equally in all respects, including for
dividends, shareholder attendance and voting rights at meetings, on
a return of capital and in a winding-up.
During the year 10,500,000 new ordinary shares of 0.4p each were
issued.
The 137,674,431 deferred shares of 0.4p, have no right to
dividends nor do the holders thereof have the right to receive
notice of or to attend or vote at any general meeting of the
Company. On a return of capital or on a winding up of the Company,
the holders of the deferred shares shall only be entitled to
receive the amount paid up on such shares after the holders of the
ordinary shares have received the sum of GBP1,000,000 for each
ordinary share held by them.
The 279,176, 540 deferred shares of 0. 099p shall be entitled to
receive a special dividend, which is payable upon the repayment to
the Company of any amount owed under certain loan agreement, after
which the Company shall, in priority to any distribution to any
other class of share, pay to the holders of the Special Deferred
Shares an aggregate amount equal to the amount repaid pro rata
according to the number of such shares paid up as to their nominal
value held by each shareholder. They shall be entitled to no other
distribution save for a special dividend and shall not be entitled
to receive notice of or attend or vote at a general meeting of the
Company. On a return of capital on a winding up of the Company,
shall only be entitled to receive the amount paid up on such shares
up to a maximum of 0.9 pence per share after the holders of the
Ordinary Shares and the Deferred Shares have received their return
on capital .
Reserves
Share premium reserve
The share premium reserve comprises the excess of consideration
received over the par value of the shares issued, plus the nominal
value of share capital at the date of redesignation at no par
value.
Share option reserve
The share option reserve comprises the fair value of warrants
and options granted, less the fair value of lapsed and expired
warrants and options.
Reserves in the consolidated statement of financial position
comprise the share option reserve, reverse acquisition reserve and
the merger reserve.
11. Earnings per share
The calculation of basic loss per share at 31 December 2019 was
based on the loss of GBP876,373 (2018: GBP1,184,843), and a
weighted average number of ordinary shares outstanding of
100,168,016 (2018: 89,440,373), calculated as follows:
2019 2018
GBP GBP
Losses attributable to ordinary shareholders 876,373 1,184,843
Weighted average number of ordinary shares
Issued ordinary shares at 1 January 89,440,373 64,783,082
Effect of shares issued during the year 10,727,643 24,657,291
------------ -----------
Weighted average number of shares at 31 December 100,168,016 89,440,373
------------ -----------
2019 pence 2018 pence
per share per share
Basic loss per share (0.87) (1.32)
----------- -------------
Diluted loss per share
Diluted earnings per share is calculated by adjusting the
weighted average number of shares outstanding to assume conversion
of all potential dilutive shares, namely share options. All of the
options existing at 31 December 2019 have an exercise price that is
greater than the market price of the shares and as a result are non
dilutive and excluded from the diluted loss per share
calculation.The calculation of diluted loss per share at 31
December 2019 was based on the loss of GBP876,373 (31 December
2018: GBP1,184,843), and a weighted average number of ordinary
shares outstanding of 100,168,016 (2018: 91,305,287).
2019 pence 2018 pence
per share per share
Diluted loss per share (0.87) (1.30)
----------- -----------
12. Financial instruments
(a) Fair values of financial instruments
The fair values of all financial assets and financial
liabilities are equal to their carrying amounts shown in the
consolidated statement of financial position.
Trade and other receivables
The fair value of trade and other receivables is estimated as
the present value of future cash flows, discounted at the market
rate of interest at the reporting date if the effect is
material.
Trade and other payables
The fair value of trade and other payables is estimated as the
present value of future cash flows, discounted at the market rate
of interest at the reporting date if the effect is material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its
carrying amount where the cash is repayable on demand. Where it is
not repayable on demand then the fair value is estimated at the
present value of future cash flows, discounted at the market rate
of interest at the reporting date.
(b) Credit risk
Financial risk management
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
receivables and cash and cash equivalents. The carrying amount of
cash, cash equivalents and term deposits represents the maximum
credit exposure on those assets. The cash and cash equivalents are
held with UK bank and financial institution counterparties which
are rated at least A .
Exposure to credit risk
The carrying amount of financial assets represents the maximum
credit exposure. Therefore, the maximum exposure to credit risk at
the reporting date of the Group was GBP99,269 (2018: GBP276,926),
being the total of the carrying amount of financial assets, shown
in the consolidated statement of financial position.
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due.
The following are the contractual maturities of financial
liabilities, including estimated interest payments and excluding
the impact of netting agreements.
Group:
Financial liabilities Carrying Contractual 6 months 6-12 1 -2 years
amount cash flows or less months
GBP GBP GBP GBP GBP
31 December 2019
Trade and other
payables 51,547 51,547 51,547 - -
--------- ------------ --------- -------- -----------
31 December 2018
Trade and other
payables 159,666 159,666 159,666 - -
--------- ------------ --------- -------- -----------
(d) Currency risk
The Group does not have significant exposure to foreign currency
risk at present. The Group does not have any monetary financial
instruments which are held in a currency that differs from that
entity's functional currency.
(e) Interest rate risk
Profile
At the reporting date the interest rate profile of
interest-bearing financial instruments was:
Carrying amount
Group:
2019 2018
GBP GBP
Variable rate instruments
-------- --------
Cash and cash equivalents 965,752 793,141
-------- --------
Cash flow sensitivity analysis for variable rate instruments
The Group's interest-bearing assets at the reporting date were
invested with financial institutions in the United Kingdom with a
S&P rating of A2 and comprised solely bank accounts.
A change in interest rates would have increased/(decreased)
profit or loss by the amounts shown below. This analysis assumes
that all other variables, in particular, foreign currency rates,
remain constant. This analysis is performed on the same basis for
2018.
Group: 2019 2018
Profit or loss Profit or loss
100 bp increase 100 bp decrease 100 bp increase 100 bp decrease
Variable rate instruments 9,658 (9,658) 7,931 (7,931)
---------------- ---------------- ---------------- ----------------
13. Related parties
Key management personnel
As at the year end, there are no key management personnel
employed by the Group in addition to the Directors.
Directors' remuneration and interests
2019 Remuneration Interests
Cash-based Share-based Shares Options
Director payments payments Totals
GBP GBP GBP No. No.
Nigel Theobald (Chief
Executive Officer) 70,000 - 70,000 16,981,319 -
Paul Titley (resigned
20 May 2019) 15,282 - 15,282 142,857 717,143
David Templeton 38,310 - 38,310 - 717,143
Luke Cairns 24,000 - 24,000 142,857 1,392,445
Christopher Britten 14,923 - 14,923 - 717,143
John Chiplin 14,667 - 14,667 - 717,143
177,182 - 177,182 17,267,033 4,261,017
=========== ============ ========= =========== ==========
The above remuneration relates to N4 Pharma Plc (and N4 Pharma
UK Limited) directors.
An amount of GBP16,000 (2018: GBP36,000) is payable to Nigel
Theobald by N4 Pharma UK Limited. This forms part of the Trade and
Other payables.
No contributions are paid by the Group to a pension scheme on
behalf of the Directors.
There are no further related parties identified.
14. Subsequent events
N4 Biotech Limited was dissolved on 14 January 2020.
The share options granted to Alan Hey totaling 717,143 options
lapsed subsequent to year end 31 December 2019 due to his departure
from the Company.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR BRGDDDUDDGGS
(END) Dow Jones Newswires
February 25, 2020 02:00 ET (07:00 GMT)
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